The Turtle showed his true color — Lawyer Green.
DC is all about feeding lawyers more and more and ever more work. DC is a lawyers’ full-employment jobs program.
We got a preliminary look at this a few yrs ago with Greece. There is no international bankruptcy court. A country that says it is defaulting on debt will have the clock run. Any time they have assets outside the country, they can be seized, and that clock running is compounding. There is no expungement. There is no court that can say debt expunged.
In the case of US Bankruptcy court, there are no provisions for a state filing. There are provisions for municipalities filing, but the text of the US Bankruptcy Code makes clear that US courts will not supersede the ability of the state to exercise control over the municipality.
And besides that, as was demonstrated with airlines, a contract with employees assuring them of pensions can be undone in a bankruptcy filing.
This is what McConnell was referring to. A bankruptcy filing by a state would result in the court undoing state pensions, which inevitably will be the only way to resolve the case. Expunging debt would do nothing more than prevent any future lenders from lending, especially if the budget continues to show deficit.